CB Richard Ellis Investors, the global real estate investment management firm, announced the launch of a UK direct property fund for Defined Contribution (DC) pension investors. The CB Richard Ellis UK Property Fund received FSA approval on 25 February, which, for the first time, will allow DC pension investors access to a fund run by a purely property specialist investment manager.
This marks a significant development for CBRE Investors, who have managed funds on behalf of Defined Benefit (DB) pension schemes for over 30 years, as the firm enters a new and rapidly developing market within the UK pensions sector. This is the first time DC investors will be able to access the CBRE Investors' UK property investment strategy.
The structure of the fund is a Property Authorised Investment Fund (PAIF), the recently approved new tax structure for UK property investments.
The rapid growth of DC pension schemes over the last few years has illustrated the need for property specialist expertise to be available to the rapidly growing number of DC pension investors in the UK. CBRE Investors has been working closely with platform providers and investment consultants in setting up this fund to offer a wider range of choice in the DC arena.
The CB Richard Ellis UK Property Fund will offer investors exposure to a diversified UK commercial portfolio and uses the established and proven CBRE Investors house approach focusing on a higher than average yielding portfolio focusing on the retail and industrial sectors. Investors will be rewarded with a diversified portfolio of assets that aims to ensure a long-term sustainable return. The fund's goal is to build a portfolio of £1 billion (approx. 1.1 bln.).
Commenting on today's announcement Nick Preston, Senior Director at CBRE Investors said, "We are delighted to announce CBRE Investors' move into the defined contribution arena and believe that our experience will allow us to capitalize on a growing and developing market. We have worked closely with our team of advisors to develop this pioneering fund structure involving a PAIF with an authorized feeder fund. We believe that our fund is the first product of its kind available in the UK market and look forward to developing this side of our business."